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California Republican Congressman Gary Miller, a homebuilder and developer, today joined with consumer groups in calling for an end to efforts to impose punitive duties on softwood lumber imports from Canada that are essential for the U.S. housing market. Nearly one third of all lumber used for homes has to be imported since domestic supply can not meet demand.
"It is important that our government look at the impact of its trade decisions on consumers," Miller said. He spoke to more than 200 lumber yard owners at the National Lumber and Building Material Dealer's legislative conference. "When we act to put tariffs in place against Canadian wood, we all know who pays -- the consumers. The proposed tariffs in this instance would put 29 percent sales tax on all Canadian lumber in a home. That clearly add nearly $1,500 per house, and will price close to 450,000 families out of the housing market since they cannot get mortgages."
"We must balance trade policy with domestic issues and needs," Miller added.
"Affordable housing is a very critical issue for America. We should not punish consumers in the interest of a handful of U.S. forest companies. The U.S. must have Canadian Lumber to survive, and we will continue to import it. It would be wrong for the U.S. to impose duties on that essential lumber that is no threat to the U.S. industry, at consumer expense."
Led by International Paper, Potlatch, Plum Creek, Sierra Pacific, Temple Inland, and southern land owners, forming the Coalition for Fair Lumber Imports, filed petitions a year ago alleging that they had been harmed by Canadian softwood lumber imports and asking for countervailing and antidumping duties. The U.S. Commerce Department said it will impose the duties pending a decision by the International Trade Commission (ITC) which is expected May 2.
Mike Fritz, a lumber dealer from Massachusetts and president of NLBMDA, participated in the March ITC hearing. "We hope that our input helped to educate the ITC commissioners about the important impacts trade decisions have on U.S. consumers. We continue to believe, as we have for over a decade, that the input of US consuming industries is vitally important to the understanding of the softwood lumber marketplace in the U.S., especially when it comes to providing insight into the everyday use and application of different species of lumber. Our nation's annual demand for Canadian spruce pine fir is well-known and well-documented throughout the U.S. consuming industries.
"As national demand for affordable housing continues to grow year by year, we further realize the importance of ensuring that a secure, stable supply of Canadian softwood is available for interior framing," Fritz added. "We continue to hope that the handful of U.S. producers seeking to block Canadian product eventually realize the potentially serious damage they may do to the U.S. housing market by continually injecting uncertainty and volatility into the market for Canadian framing lumber. For over twenty years these producers have sought special protection from the U.S. government while other components of the industry devote their time to adapting to the globalization of our marketplace.
"As the process moves forward, we will continue our efforts to educate decision makers about the important differences between lumber species, and we will continue working to ensure an end to the market volatility that has plagued lumber trade for decades," Fritz added.
Michael Carliner, an economist with the National Association of Home Builders said that any tariff acts as a tax on U.S. homebuyers, renters and consumers, creating a very substantial burden on them. "Because there are not enough trees available to produce lumber for home building in the U.S., Canadian lumber imports are absolutely vital for the construction of affordable new homes and to make improvements on existing homes in America" Carliner said.
"While the tariffs will boost lumber prices and profits of domestic producers at the expense of U.S. consumers, the number of jobs in the U.S. lumber industry will remain limited by the finite domestic timber supply," Carliner added, noting that housing and related industries that use softwood lumber employ more than 7 million American workers and outnumber U.S. lumber-producing workers by 30 to 1.
Speaking on behalf of the International Mass Retail Association, Jonathan Gold, director of international trade policy, joined in the call on the Bush administration not to let duties be imposed on Canadian softwood lumber. IMRA
-- the world's leading alliance of retailers and their product and service suppliers -- is committed to bringing price-competitive value to the world's consumers. IMRA members represent over $1 trillion in sales annually and operate over 100,000 stores, manufacturing facilities, and distribution centers nationwide and employ millions of Americans. IMRA's membership includes some of the country's largest home centers and lumber dealers.
"These companies represent the largest lumber dealers in the U.S. The lumber that these companies stock is determined not only by price, but by consumer preference," Gold said. "Prices for lumber are driven by supply and demand. Canadian lumber producers do not dictate the price that domestic producers are able to get on the market. The housing market is a factor driving movements in lumber prices."
"If Canadian lumber becomes very much more expensive for our members' customers, they will have no choice but to turn to more European producers for consistent supply to satisfy their demand for quality," Gold said. "Such a price change would not cause our customers to switch to southern yellow pine for framing where Canadian softwood is clearly their choice. These two species are simply too different to be interchangeable."
Susan Petniunas, spokesperson for an alliance of 17 national organizations and companies, American Consumers for Affordable Homes (ACAH), which has been fighting the trade action, said: "It is very sad that a segment of U.S. forestry producers and land owners have been able to get our government to impose such a ridiculous level of duties on our consumers," said. "We believe that the President should intervene and stop this process. Canada is our most important trading partner and strong supporter of U.S. government global actions. We should not allow our own government to impose a new sales tax on consumers so that a handful of companies can improve their bottom lines."
She noted that the alliance hoped that the ITC will evaluate the case on its merits, not because of political pressures. "The Commerce Department only found two instances in more than $10 billion in Canadian lumber sales where the product was directly competing with southern yellow pine," Petniunas said. "The U.S. case if very flawed."
NLBMDA, NAHB, IMRA are members of the ACAH. Other members include: American Homeowners Grassroots Alliance, Catamount Pellet Fuel Corporation, CHEP USA, Citizens for a Sound Economy, Consumers for World Trade, Free Trade Lumber Council, The Home Depot, International Sleep Products Association, Leggett & Platt Inc., Manufactured Housing Association for Regulatory Reform, Manufactured Housing Institute, National Black Chamber of Commerce, National Retail Federation, and the United States Hispanic Contractors Association.

Attendees at a meeting of Washington trade professionals held here today were urged to express their concerns to the Bush Administration about its looming 29 percent sales tax on U.S. consumers by putting protectionist duties on all softwood lumber imports from Canada. The U.S. cannot provide sufficient framing lumber and relies on Canada for approximately one-third of its needs.
Lead by International Paper, Potlatch, Plum Creek, Sierra Pacific, Temple Inland, and southern land owners forming the Coalition for Fair Lumber Imports filed petitions a year ago alleging that they had been harmed by Canadian softwood lumber imports and asking for countervailing and antidumping duties. The U.S. Commerce Department said it will impose the duties pending a decision by the International Trade Commission which is expected May 2.
"It is very sad that a segment of U.S. forestry producers and land owners have been able to get our government to impose such a ridiculous level of duties on our consumers," said Susan Petniunas, spokesperson for an alliance of 17 national organizations and companies, American Consumers for Affordable Homes (ACAH), which has been fighting the trade action. She spoke to the Washington International Trade Association.
"We believe that the President should intervene and stop this process," she said. "Canada is our most important trading partner and strong supporter of our overall government in many global actions. We should not allow our own government to impose a new sales tax on consumers so that a handful of companies can improve their bottom lines."
Petniunas said that, if the new taxes are imposed, they will add nearly $1,500 to the price of a new home, pricing close to 450,000 families out of the housing market since they can not qualify for mortgages. "Unfortunately, those most impacted are first time homebuyers and seniors seeking to lower housing costs in retirement. While $1,500 may not sound like much to some people, for many, it is the difference between being able to buy a home for the first time, or not."
ACAH believes that there should be no trade restraints on Canadian softwood lumber imports. More than 100 members of the U.S. House and Senate have signed resolutions or written letters to the administration indicating their support for free trade in lumber, and urging no new taxes or penalties on consumers.
"For the first time ever, a panel of consumers was assembled to testify before the ITC in March," Petniunas said. "They represented homebuilders, lumber dealers, The Home Depot, manufactured housing firms, and others. Each clearly pointed out that softwood lumber does not compete with southern yellow pine, and that the charges by the Coalition are false." The panel appealed to the Commissioners to reject the Commerce Department's plan to impose the duties.

In recent years “globalization” has become a battle cry for the forces of big government. International gatherings such as the World Trade Organization meeting in Seattle or the recent European Union summit in Barcelona attract hundreds of thousands of protestors from around the globe. Union members and environmentalists man the picket lines with an amalgam of protestors rallying against a hodge-podge of social injustices. While it is difficult to discern a coherent vision among the polyglot of voices, one thing is clear: whatever the issue, the solution is more government and less free trade. This hostility towards increased exchange among nations ignores benefits that free trade bestows upon all nations.

The U.S. Commerce Department's decision today to impose anti-dumping and countervailing duties totaling 29.01 percent on Canadian softwood lumber shipments into the U.S. will harm housing affordability and the nation's economy by acting as a hidden tax on new homes and on millions of workers in lumber-dependent industries, according to the American Consumers for Affordable Homes (ACAH).
"By following the wishes of a handful of U.S. forestry companies, the U.S. Commerce Department's ruling today stands as a slap in the face to millions of American consumers and workers who rely on ready access to Canadian softwood lumber products for housing, furniture, cabinetry and other uses," said Susan Petniunas, spokesperson for the ACAH, an alliance of 17 national consumer groups and companies representing more than 95 percent of the consumption of Canadian softwood lumber in the U.S.
Canadian lumber imports are critical to meeting the nation's housing needs because there are not enough trees available to produce lumber for home building in the U.S. Petniunas charged that today's Commerce Department action makes a mockery of President Bush's public proclamations of support for free trade.
"U.S. forestry companies have argued for more than 20 years that imported lumber is somehow subsidized. They have always lost their arguments before international panels, and this latest ruling won't stand up to scrutiny either. The U.S. must have Canadian lumber to meet its housing construction needs. U.S. forests have been over-harvested and there is no way for domestic producers to meet the demand. Import barriers will simply raise lumber prices and forest company profits, without creating new lumber mill jobs," she said.
If the announced duties are added to U.S. lumber prices, the cost of an average new home would increase nearly $1,500," Petniunas continued. "U.S. Census Bureau figures indicate that such an increase could force close to 450,000 prospective American home buyers out of the market. Additionally, the home building industry employs 6.5 million people. This industry, which has been one of the healthiest segments of the nation's economy, could be seriously harmed by the Commerce Department's decision."
"Trade restrictions on lumber cause artificial price increases and volatile swings in the lumber market, both of which hurt housing affordability," said Bobby Rayburn, a home builder from Jackson, Miss. and vice president and treasurer of the National Association of Home Builders, an ACAH member.
Attention now swings to the International Trade Commission (ITC), which is expected to rule in late April on whether U.S. forestry companies have suffered any harm from Canadian softwood lumber imports.
"We can only hope that the ITC sees through some of the false arguments that use of lumber from Canada comes at the expense of U.S. lumber mills," Petniunas said.
"The types of lumber imported from Canada are different from the type produced from U.S. forests," said Rayburn. "Ask any home builder across the United States-we need Canadian spruce pine fir for wall studs. Southern yellow pine, because it is more likely to warp, is better suited for beams and joists. Framing walls with southern yellow pine just won't work for the homes we want to deliver to American consumers."
In addition to NAHB, ACAH members include American Grassroots Homeowners Alliance, Catamount Pellet Fuel Corporation, CHEP USA, Citizens for a Sound
Economy, Consumers for World Trade, Free Trade Lumber Council, the Home Depot, International Mass Retail Association, International Sleep Products Association, Leggett & Platt Inc., Manufactured Housing Association for Regulatory Reform, Manufactured Housing Institute, National Black Chamber of Commerce, National Lumber and Building Material Dealers Association, National Retail Federation, and the United States Hispanic Contractors Association.

In what is perhaps one of the most important economic decisions of his administration, President Bush is moving forward with a plan to impose a 30 percent tariff on imported steel. While this protectionist measure will be welcomed by the steel industry, consumers should be wary. Higher steel prices translate into higher prices for a wide array of consumer products, from automobiles to appliances to housing. Worse, it is not evident that higher tariffs will help the steel industry; taxpayers may be the next target as steelmakers seek greater subsidies and benefits from the federal government.

With U.S. and Canadian trade negotiators engaged in 11th hour negotiations to resolve the long-running cross-border dispute over lumber, a delegation representing the interests of millions of U.S. consumers and workers in lumber-dependent industries today called on Canadian Trade Minister Pierre Pettigrew to oppose any border measures such as quotas, tariffs or taxes that would restrict lumber supply and harm consumers by raising prices.
"We support changes to make lumber supply more responsive to market demand and applaud the far-reaching changes proposed by the Canadian provincial governments in the management of their timber that would remove incentives to over-produce during periods of weak demand, and make sales practices more transparent to eliminate suspicions that their timber sales are not market-based," said Susan Petniunas, spokesperson for the American Consumers for Affordable Homes (ACAH), an alliance of 17 American consumer and business groups fighting trade restraints on softwood lumber that harm U.S. consumers.
"However, with Canadian firms facing punitive penalties imposed by the U.S. Commerce Department, we are strongly opposed to the idea of a negotiated settlement for the sake of expediency that institutes any so-called border measures such as quotas, tariffs or taxes. This would be far worse to the interests of consumers than no agreement at all," Petniunas added.
The U.S. Department of Commerce last year imposed preliminary anti-dumping and countervailing duties on Canadian lumber shipments into the U.S. in response to complaints lodged by a handful of U.S. lumber producers. It is expected to issue a final ruling on the cases on March 21. In the meantime, U.S. and Canadian negotiators have been engaged in talks to find a negotiated settlement before the Commerce Department makes its final decision.
"Free trade is the cornerstone of NAFTA and a basic principle of the Bush Administration," said Petniunas. "To extend these duties next month would fly in the face of free trade. That is why it is extremely important that the Canadian government stands firm and does not allow the Coalition for Fair Lumber Imports (the U.S. lumber lobby) to use threats or intimidation to coerce it into making a bad deal that would create distortions in the marketplace, provide windfall gains for timber barons and leave millions of U.S. consumers -- the home buyers, renters and people remodeling their homes -- footing the bill in the form of higher lumber prices."
If the duties were extended in March, history has shown that they are likely to be lower than the tariffs currently in place, and Canada would still have a strong case to present to the World Trade Organization and NAFTA, according to Petniunas.
"Canada has already laid the groundwork for an appeal with the World Trade Organization and with NAFTA, and we think the Canadians have a solid legal foundation," said Petniunas. "There have been three previous countervailing duty cases on this issue, and in each case in which it was taken to a final decision, it was ultimately determined that the Canadian government did not provide unfair subsidies to its lumber industry. As this case moves forward, we believe this conclusion will once again be reaffirmed, and that free trade in lumber between Canada and the U.S. will prevail."
"Trade restrictions on lumber cause artificial price increases and volatile swings in the lumber market, both of which hurt housing affordability, said Bobby Rayburn, a home builder from Jackson, Miss., and vice president and treasurer of the National Association of Home Builders (NAHB), an ACAH member. "Each one dollar increase in the price of framing lumber per 1,000 board feet adds about $20 to the price of an average new home."
If the current duties are fully reflected in U.S. lumber prices, the cost of an average new home would increase by at least $1,500. U.S. Census figures indicate that such an increase could force at least 450,000 prospective American home buyers out of the market.
Reiterating comments he made before the Senate Finance Committee during a Feb. 13 hearing on lumber trade issues, Rayburn told Pettigrew, "Because of the harmful effects of artificial price increases, I want to be clear; we are opposed to border measurers such as quotas, tariffs or export fees that restrict imports of Canadian lumber."
Furthermore, Rayburn said that lumber from Canada is qualitatively different from the softwood lumber produced in the southeastern United States and is used for different purposes.
"The spruce and white pine from Canada is better suited for wall framing," he explained. "Southern yellow pine, the most common domestic species, is more likely to bend and warp, and is used for beams and joists and for outdoor applications requiring pressure-treated lumber. In the absence of Canadian spruce, builders are likely to turn to light weight steel studs or lumber imports from Europe in order to build homes with walls that don't crack."
Retailers are also opposed to the U.S. trade action.
"Home Depot is focused on delivering the right product at the right price to our customers," Annette Verschuren, president, Home Depot Canada, told Pettigrew. "That is why we support free trade and Canada's position on this issue. The Softwood Lumber agreement imposed volatility in the marketplace for consumers. We are encouraging the Canadian government to stay the course and continue to pursue free trade in lumber between Canada and the United States."
In addition to the negative impact on home buyers, others in the industry will be harmed, according to ACAH.
"These duties will reduce the number of new homes being built," Petniunas said. "The seven million people employed in the housing construction sector, manufactured housing builders, employees of lumber yards and mass retailers that supply home builders and others in the manufacturing and supply chain will all suffer."
In addition to NAHB and The Home Depot, other ACAH members include: American Grassroots Homeowners Alliance, Catamount Pellet Fuel Corporation, CHEP USA, Citizens for a Sound Economy, Consumers for World Trade, Free Trade Lumber Council, International Mass Retail Association, International Sleep Products Association, Leggett & Platt Inc., Manufactured Housing Association for Regulatory Reform, Manufactured Housing Institute, National Black Chamber of Commerce, National Lumber and Building Material Dealers Association, National Retail Federation, and the United States Hispanic Contractors Association.

A group representing more than 95 percent of the domestic consumption of lumber in the United States today urged the Senate Finance Committee to "protect the interests of U.S. consumers" by asking the Bush Administration to interpret pending cases involving softwood lumber trade with Canada in a "fair, factual, and unbiased manner."
The Alliance of American Consumers for Affordable Homes (ACAH), an ad hoc group of 17 national organizations, called for free trade of softwood lumber between Canada and the U.S. in a written statement presented to the Senate Finance Committee.
"Any level of trade restraint on lumber harms U.S. consumers and the national economy," explained Susan Petniunas, ACAH spokesperson. "While we applaud the Administration for attempting to reach a long-term durable solution for trade between the two countries, we are greatly concerned by recent actions taken by the Commerce Department."
Petniunas indicated that Commerce announced in August it would impose a 19.3 percent countervailing duty on Canadian softwood lumber imports. Two months later it announced it would tack on an additional 12.6 percent in duties for anti-dumping.
"These claims of subsidy (the basis for the Commerce Department's action) remain unsubstantiated even though U.S. industry had brought numerous cases," pointed out Robert Verdisco, president, International Mass Retail Association, an ACAH member. "The U.S. has never been able to prove in a neutral forum, such as U.S. courts, a NAFTA tri-national panel or at the World Trade Organization that Canada's forest policies constitute a subsidy, as defined by the General Agreement on Tariffs and Trade."
Yet, the Commerce stance is hurting U.S. consumers and the economy, according to ACAH.
"Imports from Canada represent approximately 35 percent of the softwood lumber used by U.S. consumers," Petniunas reported. "These actions create harm for potential American homeowners and the American economy. As the Administration strives to strengthen the economy, it must remember that the housing sector represents one of the strongest and most important segments of our economy."
"Home building and remodeling account for two-thirds of lumber consumption in the U.S.," said Bobby Rayburn, vice president and treasurer, National Association of Home Builders, an ACAH member. "Lumber accounts for a larger share of the cost of a home than any of the other materials used by homebuilders. Each one dollar increase in the price of framing lumber per 1,000 board feet adds about $20 to the price of an average new home."
U.S. consumers and lumber-dependent industries are already experiencing the harmful effects of these trade restrictions, according to ACAH.
"The preliminary decisions on lumber tariffs have resulted in increased price volatility in the market, forcing U.S. purchasers to make provisions to incorporate what amounts to as much as a 32 percent tax imposed by the Commerce Department," said Petniunas.
"It is estimated that the Preliminary Determinations by the Commerce Department could add as much as $1,000 to the price of a new home, thus excluding nearly one-half million U.S. households from mortgage eligibility," Petniunas continued.
Additionally, the Commerce Department actions conflict with other steps by the Bush Administration to promote free trade, according to the ACAH.
"Just last month President Bush, while speaking to the Organization of American States, indicated he would seek a free trade accord with the countries of Central America," Petniunas reported. "To encourage free trade with Central America while instituting protectionist tariffs with Canada -- our best trading partner in this hemisphere -- simply does not make sense."
ACAH today called the Commerce Department's action nothing more than a "tax increase on housing."
"ACAH opposed implementing tariffs and other potentially restrictive border measures because they cause artificial price increases and volatile swings in the lumber market, which hurts housing affordability and U.S. purchasers of lumber," Petniunas said. "These types of actions are simply a tax increase on housing."
"We urge that the Senate Finance Committee protect the interests of U.S. consumers and lumber-dependent industries that employ seven million workers by requesting that the Administration interpret pending trade cases in a fair, factual, and unbiased manner," ACAH wrote in its testimony. "Moreover, it is imperative the Administration exclude any provision that would impose a tax, quota or other government-mandated cost increase on U.S. consumers in negotiations with Canada."